Founder's Story: Unbranded to Unforgettable – How Korosh Farazad Reinvents Hospitality

Episode Overview In Episode 210 of IBH Media's Founder’s Story, host engages in an insightful conversation with Korosh Farazad, the Managing Director of Farazad Advisory. Farazad shares his extensive experience in real estate and hospitality investments, delving into his investment strategies, the importance of customer experience, overcoming business challenges, and his recent strategic move to Switzerland.

1. Introduction to Korosh Farazad

The episode kicks off with the host introducing Korosh Farazad, highlighting his global expertise across Europe, North America, and Asia Pacific. Farazad is recognized for his deep involvement in structured financing and engineering within complex real estate transactions.

Host: "I'm very interested to hear the state of how everything is. I know you recently moved to Switzerland. We can talk through that too."

[00:30]

2. Spark of Passion: Real Estate and Hospitality

Farazad discusses the origin of his passion for hospitality intertwined with real estate. He emphasizes the intricate value creation behind hotels and his affinity for engaging with people, which steered him toward the hospitality sector nearly two decades ago.

Farazad: "Putting real estate and hospitality into one sentence just sparked my attention... being in the hospitality industry, you have to be hospitable, so to speak."
[01:16]

3. Investment Philosophy and Strategies

Farazad outlines his firm's investment philosophy, focusing on value-adding opportunities rather than core assets. He prefers investing in hotels without established brands, aiming to revamp them by introducing franchise operators and enhancing food and beverage concepts tailored to the hotel's identity and regional appeal.

Farazad: "We look for opportunities that are value adding, upside. We don't look for core assets... we look at how we can revamp the opportunity by bringing in a franchise operator."
[02:36]

4. Criteria for Hotel Investments

Delving deeper, Farazad specifies the criteria his firm considers when evaluating potential hotel investments. Key metrics include the size of the property, with a preference for hotels housing between 85 to 200 rooms to maintain a quality hospitality experience. He also explains the financial structuring, often acquiring a majority stake while allowing current owners to retain a minority share, thereby aligning interests and sharing future upsides.

Farazad: "We look for at least a minimum of 85 rooms and above maximum is 200 because anything above 200 becomes a room factory... we give a minority stake as our local sponsor."
[04:11]

5. Enhancing Customer Experience

The conversation shifts to the critical role of customer experience in hospitality. Farazad highlights the necessity of engaging guests from the moment they check in, ensuring a variety of on-site options like signature restaurants and quality bars to keep guests within the hotel premises, thereby driving revenue beyond standard occupancy metrics.

Farazad: "Customer experience or guest experience is the most important thing... you have to hold them there for 24 hours by doing that."
[07:02]

He cites SLS Dubai as an exemplary model, praising its comprehensive service and attention to detail that consistently captivates guests.

Farazad: "The SLS Dubai... customer care that is just mind blowing... it captivated me to use that as the first brand."
[07:02]

6. Overcoming Business Challenges

Farazad shares candid reflections on his journey, acknowledging numerous setbacks and failures that have shaped his resilience and business acumen. He underscores the importance of perseverance, continuous learning, and maintaining a positive outlook despite challenges.

Farazad: "I've managed to get up and just clean myself up and get back to business as usual... Without failure, there's no success."
[09:58]

7. Strategic Relocation to Switzerland

A significant portion of the episode is dedicated to Farazad's strategic decision to relocate his company from the UK to Switzerland. He explains that the UK market was undergoing a correctional phase, limiting growth opportunities. In contrast, Switzerland offered a more conducive environment for rapid transactions, enhanced efficiency, and greater transparency. This move allowed Farazad Advisory to accelerate its operations and secure new assets swiftly.

Farazad: "Relocating the company to Switzerland was a very quick decision... in London would have taken us six months. Over here, it's taking us five weeks."
[11:30]

He attributes the successful relocation to four key elements: great partners, prime location, efficiency, and transparency.

Farazad: "Great partners, great location, efficiency and transparency... got us to where we are today."
[11:30]

8. Insights on the UK Market Exodus

Farazad touches upon the broader trend of millionaires leaving the UK, corroborating it with personal observations. He reflects on the challenges faced by professionals in London, emphasizing the need for patience and strategic planning during market downturns.

Farazad: "Everyone's just miserable... London is going through a process and it just needs a little bit of tender loving care."
[12:33]

9. Personal Experiences and Relocation Benefits

The host shares personal anecdotes about Switzerland, echoing Farazad's positive experiences regarding safety, quality of life, and exceptional hospitality standards. This mutual appreciation underscores the benefits of Farazad's relocation decision.

Host: "Zurich was quite expensive. But great, great experience with hospitality. People were amazing."
[13:45]

10. Advice for Aspiring Entrepreneurs

Concluding the discussion, Farazad offers practical advice to those aspiring to enter the hospitality and real estate sectors. He emphasizes starting small, building a solid foundation, and cultivating a deep understanding of both the operational and customer-facing aspects of the business.

Farazad: "Start small and believe in what you're doing... You must either really have thick skin for it because it's really hard and more importantly you must have a good passion for it."
[14:18]

He likens entrepreneurial growth to a child's development, advocating for gradual progression and comprehensive learning.

Farazad: "A baby doesn't start doing marathons from the day they're born. They have to crawl first and then walk."
[14:18]

11. Final Thoughts and Contact Information

The episode wraps up with the host expressing admiration for Farazad's journey and success, while Farazad invites listeners to connect via email for further discussions and potential collaborations.

Farazad: "You can contact farazad advisory.com."
[19:08]

Conclusion Episode 210 of Founder’s Story offers a deep dive into Korosh Farazad's innovative approach to hospitality and real estate investments. His emphasis on value addition, exceptional customer experience, resilience in the face of challenges, and strategic business decisions provides invaluable insights for entrepreneurs and investors alike. Farazad's journey underscores the importance of passion, adaptability, and strategic foresight in building a successful business in the dynamic hospitality industry.